Coping with the aftermath of violent death is tough enough without others manipulating our vulnerability and hijacking our wallets. Sadly, the Funeral Industry has tricksters.
But to be fair, just like mechanics, realtors, contractors and others, some funeral homes are great, others average and some are merely driven by profit.
Ignorance and compliance cripple our ability to spot the pitfalls. Let’s fix that, shall we?
The Funeral Rule. The funeral industry is regulated by the FTC. They enforce The Funeral Rule, a consumer protection law. This forces the funeral care industry to be transparent about their goods, prices, and services and separate the needed, from the optional. Be aware that The Funeral Rule does not offer consumer protection for cremations or cemetery expenses.
You see, a feverish trend over the last couple of decades prompted mergers. Big businesses gobbled up the small. Traditional funeral homes in town (often family-owned) have been quietly going the way of CDs and checkers at Walmart. You’d be forgiven if you never noticed.
By intertwining funeral homes together under one corporate umbrella, these firms leverage economies. Never assume the savings are passed on to the consumer or that service is improved.
When family-owned businesses are bought out, the old name may still be affixed to the building and stationery, along with the same staff (to profit from their hard-won reputation). It also aids in obscuring who owns the place. So, customers are misled to think they’re dealing locally.
The fine print give-away at the bottom of ads may whisper “network” of providers, a “private equity firm,” “shared resources, LLC,” “foundation of partners” or “consolidated.”
ABC News reports that the “industry is rife with price gouging and misinformation.” The industry’s profits have been declining due to a trend in consumers opting for direct cremations. So, they’re finding ways to make up the difference.
And they’re positioning themselves for the anticipated boon in funeral services due to our aging population. Not only are baby boomers approaching extinction, but so are many owners of family-run funeral homes. So, some sell to embrace the windfall and enjoy their golden years. Before the trend, businesses were selling from 3 – 5 times their annual revenue. Now it’s 7 – 9 times.
The new, partnerships have sometimes marked up caskets 500% over wholesale and given false information about embalming or “better body preservation.” Caskets aren’t intended to preserve the deceased. Some over-priced “protective features” like rubber gaskets can even be dangerous (due to the build-up of volatile vapors!).
Bigger corporations are even expanding into post-funeral services. Estate resolution and auctions are examples.
The FTC did a series of sweeps to assess funeral home compliance with The Funeral Rule back in 2009. “Significant violations” were found in about 1/3 of businesses – an increase from 1996. Shame on them!
Insurance Assignment Services Agreement. To fatten the bottom line, some hustlers employ unlicensed embalmers. Others push life insurance policyholders to sign an “insurance assignment services” contract for a fee.
This contract allows the funeral home to work directly with your life insurance claims rep (“To take care of all the paperwork for you.”) From then on, they make all decisions on your behalf in so far as the policy is concerned. So, if the business inflates its price, or includes unwanted services and never completes them, they can pocket the difference, and no one is the wiser. Moreover, if the defrauder violates the terms of your life insurance policy, the total claim could be voided. You’re out of pocket and even paid a fee to bring it about.
Who’s The Heavyweight? The largest provider of funeral goods and services is Service Corporation International (SCI) based in Houston, Texas. This conglomerate grossed $4.1 billion in revenue last year with a network of 2,000 locations coast to coast.
Currently, SCI goes by these brands: Dignite’/Dignity Memorial, National Cremation, Advantage, Rose Hills Memorial Park, Trident Society, LHT Consulting Group (for “the lives and legacies of distinguished and noteworthy” which can include televised memorials), Caballero Rivero in Cuba, Funeraria Del Angel and Neptune Society.
In 2022 the total compensation package for the CEO of SCI (base pay, bonus, stock awards, and so on) came to $12,736,183 (or $34,893 per day) according to Salary.com.
In 2017 CBS disclosed a report from Funeral Consumers Alliance and Consumer Federation of American which revealed that SCI’s fees were as much as 72% higher than independent rivals.
Elsewhere the national average cost range for a full-service funeral is between $7,000 – $10,000 (paid upfront). This doesn’t include flowers, organist, or extra security to keep the service private and away from the media.
Public cemetery plots cost about $2,000. That cost may or may not include upkeep. So ask.
A funeral director conference distributed pamphlets entitled “Moving Families Beyond an Inexpensive Option.” This is echoed by a recent funeral blog I found which recommends that undertakers “use emotion-driven marketing.”
What Can You Do?
Know The Funeral Rule. Download, read, and understand The Funeral Rule. If you’re too overwhelmed, ask a friend (or two) to help. And by all means, bring it with you to the funeral home! As stated above, it does not provide financial consumer protection for burial or cremation expenses.
Read the Ad’s Fine Print. Who owns the place? Is it part of a “network,” “private equity firm,” “shared resource,” “foundation of partners” “affiliate,” or “consolidated group?” Sometimes it’s listed under “terms and conditions.” Pause. Think. Are you dealing locally?
Bring a Friend of Two. When you walk into a funeral home have someone more emotionally removed from the death help you from being exploited by the hard sell. Have them understand The Funeral Rule. Encourage them to ask questions. You need not decide what you want at that moment. Speak to your friend in private before deciding.
Buy Online. Rent a Casket. Did you know Walmart, Amazon, Costco, and other retailers sell caskets that are cheaper and just as useful as the “showroom models”? (often with a five-day delivery turnaround from free to $50.00). An average online casket runs $1,200 (versus $2,500+ on-site).
Dignity Memorial/Advantage Services list caskets ranging from $1,545 to $5,295.
Another option is to rent a casket with a removable interior. The body never touches the rented casket itself. The liner (usually wood) is removed afterward for burial or cremation. Not all facilities offer this option. So, ask.
The same goes for cremation urns. Buy offsite. Cost depends on size, material, and type of lid.
(Be aware that flying commercially with human ashes requires the contents of the urn to be viewable through an x-ray at airport security. Amazon sells TSA-compliant containers for about $30 and permanent ones from $50 – $400.)
Think Twice About Passing the Buck. Signing an “insurance assignment services” contract has risks. Think it through. If you’re just too overwhelmed, consider asking your attorney to help you deal with the policy.
What’s In Your Wallet? To try and gauge the thickness of your bank account and steer you toward pricey services and goods, the profit-driven business owner will slyly and prematurely ask “And where might you live?” Be vague. “Not far.” “Within driving distance.” “Well, not in Santa Monica where I’d love to be!” “Next to some fine neighbors.” Or just ignore their inquiry. It’s inappropriate. At that point, it’s none of their business.
Record It / Write it. Have funeral home employees put their claims in writing and/or let them know they’re being recorded (“for future reference.”) The B.S. will likely come to a standstill.
Consider Direct Cremation. Any funeral business can handle a cremation if you don’t wish to contact the crematorium directly. But it will cost you. Usually, the staff at the crematory can handle all aspects of the cremation including the death certificate and transporting the body to the crematory for a nominal fee. The usual cost is around $1,000.
With cremation you can arrange a service later when you have your wits about you and when it’s convenient for everyone. It may even be necessary if the medical examiner delays the release of the body while the investigation is ongoing. Services can be held in any suitable location – even outdoors. But by no means are you obligated to have one ever if you don’t want to.
Cemetery space for cremation is, of course, optional.
Obituaries Optional. Many people think obituaries published in a newspaper are legally required. No. They’re entirely optional.
Costs of death notices vary considerably depending upon where it’s published, the length of the announcement if a photo is included, and days in print. Smaller towns may charge nothing. In major cities, an elaborate obituary running for a few days may cost as much as $2,000.
The New York Times will publish four lines of text, without a photo, for one day for $263.
Be aware of scammers who impersonate funeral home staff by skimming obituaries online or in the paper. They’ll call with an urgent and unbeatable offer. Don’t fall for it. Always contact the funeral home or crematorium directly.
Another hazard of obituaries which contain details about the service date/time is that they broadcast when you aren’t home. You might as well leave your front door open. At a minimum, have a neighbor keep a lookout during the funeral service and an extra car parked in your driveway while away. Why not leave the t.v. on also?
Embalming. Embalming is not required by law anywhere if the body is to be cremated or buried within 48 hours of death. Currently, the nationwide average cost of embalming is $700.
Green Funerals. This trend started small but is growing. Embalming, vaults, and metal coffins are eliminated. The aim is not only to lower costs but to be more environmentally friendly. It’s legal in every state. It is a down-to-earth option for consumers who want to benefit the planet.
But some large corporations are taking note.
With green funerals, the deceased is sometimes placed under a simple cotton shroud before being lowered into the ground. Many families opt for a natural woven willow casket for burial in a nonprofit conservation park (like Moles Farewell Tributes in Ferndale Washington). Formal services are optional. One drawback is that a grave marker may be limited to a small plaque or restricted altogether.
Home burials are allowed everywhere but Arkansas, California, Indiana, Louisiana, Washington State, and Washington D.C.
For more information contact the Green Burial Council.
Shop around and compare. This is a no-brainer. We compare-shop for lawnmowers and plumbers. Why not for caskets, urns, and funerals? Sadly only 1 in 5 families do. If a business doesn’t put their prices on the internet either email them and get their answer back in writing or detour them.
A pending 2023 court order would require funeral businesses to post price lists online and name third-party providers. Let’s wait and see and hope it becomes law.
Be informed. Know your options. Resist pressure. Voice your preferences. Bring a friend. We are not just customers with money to burn. We are grievers paying our last respects following one of the most harrowing experiences we will ever face – the murder of a loved one.
For more information see https://fortune.com/2022/09/22/death-care-funeral-home-industry-private-equity/